BlackBerry Said to Have Sought Buyers Since 2012

Heins was counting on the introduction of the BlackBerry 10 operating system and a range of new phones to revive the company’s fortunes. So far, that hasn’t happened. Photographer: Scott Eells/Bloomberg

Aug. 14 (Bloomberg) -- BlackBerry Ltd.’s announcement that
it will consider takeover bids followed almost a year of
advisers unsuccessfully canvassing potential buyers in search of
a deal, two people with knowledge of the matter said.

In recent months, as BlackBerry sales and subscriber
numbers deteriorated, bankers from JPMorgan Chase & Co. and RBC
Capital Markets quietly contacted possible bidders and found
little interest in buying the whole company, especially among
private-equity firms, said the people, who asked not to be named
because the talks were private.

BlackBerry’s dimming prospects led the company to announce
on Aug. 12 a special board committee that will evaluate all
possible options, including joint ventures, partnerships or an
outright sale. Prem Watsa, a Toronto businessman and
BlackBerry’s largest shareholder, also is stepping down from the
board, signaling that he may play a role in rescuing the
company. JPMorgan is conducting the strategic review.

BlackBerry’s board and its advisers are now waiting to see
whether Watsa and his investment firm, Fairfax Financial
Holdings Ltd., will put together a bid to take the company
private, the people said. That would let BlackBerry restructure
itself away from public scrutiny. No offer has been made so far,
according to the people.

Adam Emery, a spokesman for Waterloo, Ontario-based
BlackBerry, declined to comment, as did Toronto-based Fairfax,
which owns almost 10 percent of the smartphone maker.
Representatives from JPMorgan and RBC also declined to comment.

Smartphone Innovations

BlackBerry’s decline began at least three years ago, when
its slow reaction to Apple Inc.’s smartphone innovations began
taking a toll on the company’s once-torrid sales growth. The
revamped BlackBerry 10 system didn’t debut until this January,
six years after Steve Jobs unveiled the iPhone -- too late for
the company to recover from an exodus of users and developers.
Apple and Google Inc.’s Android platform also have made inroads
in the corporate market, once BlackBerry’s biggest stronghold.

Over the past three days, optimism that BlackBerry could
finally attract a buyer has propelled the stock by 15 percent.
The shares rose 2.3 percent to $11.18 at 10:58 a.m. in New York.

BlackBerry’s advisers had suggested in late 2011 that it
explore a sale as the company’s smartphones continued to lose
market share to the iPhone and Samsung Electronics Co.’s Galaxy
lineup of devices, said one of the people. Instead, co-founders
and co-Chief Executive Officers Mike Lazaridis and Jim Balsillie
stepped down from the board and were replaced by Thorsten Heins,
a former Siemens AG executive who had been serving as
BlackBerry’s chief operating officer.

Financial Concerns

BlackBerry made the decision to form a special committee
and publicly announce a strategic review because it was
concerned about its financial results and disappointing unit
sales of the BlackBerry 10 phones, said the person. No offer or
outside buyout interest prompted the move, according to the two
people.

Tim Dattels, a BlackBerry director and senior partner at
private-equity firm TPG Capital, is leading the committee
evaluating the company’s options.

Heins was counting on the introduction of the BlackBerry 10
operating system and a range of new phones to revive the
company’s fortunes. So far, that hasn’t happened. Sales of the
new Z10 touch-screen phone missed analysts’ estimates by almost
a million units last quarter, contributing to a surprise loss.
The company is projecting more red ink for the current period.